Earlier today, Volkswagen held a press conference at its headquarters in Wolfsburg, Germany, to update the world about the automaker's ongoing emissions scandal. VW CEO Matthias Müller and chairman Hans Dieter Pötsch discussed the roots of the problem, VW's proposed fixes for some of the affected cars, and the company's reorganization plans.

Further Reading

Further Reading

In fact, VW has two separate emissions problems. The first came to light in September, when the US Environmental Protection Agency sent a notice of violation to VW informing the car maker that 500,000 diesel-engined cars would have to be recalled over "defeat device software" embedded in their engine control units. VW's four-cylinder EA 198 diesel engine contains code that detects when a car undergoes an emissions test and adjusts the engine tuning. This decreases the amount of NOx compounds produced in the exhaust to legal limits, allowing the vehicle to pass the test at the cost of reduced power (and therefore efficiency).

A second issue was revealed last month, discovered during VW's internal investigation of the scandal. This time it affects VW group with 1.4L cars sold in Europe. The company at first reported that it had sold up to 800,000 cars that emitted significantly more CO2 than claimed during type approval, but more recently it has downgraded this number to just 36,000.

Individual misconduct and cultural failures

In the press conference, Pötsch said that blame for the NOx cheating was caused in part by "individual misconduct" as well as failed internal procedures and a culture in some departments "that tolerated breaches of the rules." All of this was caused by a desire to expand diesel sales in the US, a desire that wasn't matched with sufficient time or budget to develop engines that fully complied with the tough NOx emissions regulations of the US.

"Looking back, we regrettably have to realize that the developers of the EA 198 project simply couldn't find a way to meet tougher US NOx limits by permissible means. Or at least a way... which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOx levels by various means such as adjusting exhaust gas recirculation levels depending on whether the vehicle was on the road or on a test bench," Pötsch said.

Even when technical solutions did become available, "they were not used in the mistaken interest of customers," he said.

Internal remedies will include new processes for developing and approving ECUs, as well as upgraded IT systems that will help VW track its work and employees better. VW will also release real-world emissions data and will use third parties to verify the numbers in future.

Pötsch then addressed the V6 engine used by Audi and Porsche. Unlike the EA 198 engine, the V6 diesel uses the same software whether it's on the road or being tested; the issue is an auxiliary device that warms the catalytic converter for cold starts. "Audi will be presenting a technical solution to CARB [the California Air Resources Board] and the EPA as swiftly as possible, once it has been approved," Pötsch said.

Later in the conference, CEO Müller announced that a fix is in the works for European EA 198 engines, and that VW hopes to have the recall concluded by the end of 2016. But the company is still working on something similar for affected US cars. "The situation in the United States is more complicated than it is in Europe, Müller said. "That is in part due to the much tighter NOx levels on the other side of the Atlantic, so retrofitting the vehicles there to meet valid emissions limits is quite simply a much bigger technical challenge. We are in a constant and intensive dialogue with both US agencies (the EPA and CARB) and we believe we have made significant progress in recent weeks. But I trust you all understand we can only announce our solution concepts for North America once they have been fully and finally coordinated with the authorities there."

With regards to the CO2 cheating in Europe, Pötsch said that the number of cars affected is much smaller than the 800,000 initially reported, and that the financial implications for VW will be much less than the €2 billion the company had set aside.

120 Reader Comments

Internal remedies will include new processes for developing and approving ECUs, as well as upgraded IT systems that will help VW track its work and employees better. VW will also release real-world emissions data and will use third parties to verify the numbers in future.

I hope this is more than just lip service to reestablish a company's commitment to producing quality cars.

Sounds like an internal whitewash to push liability down to the worker bees and engineers, and allow management to pretend they were not knowingly complicit. I would say that knowledge of what was going on probably went up pretty high, as this scheme requires knowing participation in multiple departments, and across marques.

Internal remedies will include new processes for developing and approving ECUs, as well as upgraded IT systems that will help VW track its work and employees better. VW will also release real-world emissions data and will use third parties to verify the numbers in future.

I hope this is more than just lip service to reestablish a company's commitment to producing quality cars.

I want to be able to trust VW again next time I need to buy a car.

I was going to pick the exact same quote out of the article. It sure sounds to me like they had zero accountability. Now they're going in the direction of implementing a new some new software to track exactly what their employees are doing...

Sounds like an internal whitewash to push liability down to the worker bees and engineers, and allow management to pretend they were not knowingly complicit. I would say that knowledge of what was going on probably went up pretty high, as this scheme requires knowing participation in multiple departments, and across marques.

You may want to take a look at the management boards of VW and Audi. Tell me, if you can find someone called Hackenberg, Winterkorn, Hatz and Neußer. ;-)

OK, so management looked the other way, while demanding "Good, Fast AND Cheap" from the engineers (who no doubt informed their immediate managers that this was not possible, and were told, effectively, "I don't want to hear excuses, I want a product that meets the specs, and soonish"), leaving them only one way out.

I'm sure some smart engineer kept an email trail of all this...and that will eventually come out.

Internal remedies will include new processes for developing and approving ECUs, as well as upgraded IT systems that will help VW track its work and employees better. VW will also release real-world emissions data and will use third parties to verify the numbers in future.

I hope this is more than just lip service to reestablish a company's commitment to producing quality cars.

I want to be able to trust VW again next time I need to buy a car.

I was going to pick the exact same quote out of the article. It sure sounds to me like they had zero accountability. Now they're going in the direction of implementing a new some new software to track exactly what their employees are doing...

I'm having a hard time believing that VW was completely unaware that this was going on, much less that they weren't actively pushing for this or that this was the result of an unknown 'individual' rogue engineer. I'm incapable of that much suspension of disbelief.

"Pötsch said that blame for the NOx cheating was caused in part by "individual misconduct" as well as failed internal procedures, and a culture in some departments "that tolerated breaches of the rules.""

They are right about the corporate culture. But wrong in trying to say it is isolated or in some departments etc. The culture is throughout the company and set over time by senior management. Once that goes awry as it did here it's due to long term previous management styles and decisions and is directly the responsibility of senior management. Corporate culture is determined by senior management.

Not later than 12 months after November 15, 1990, the Administrator shall revise the regulations promulgated under this subsection to add test procedures capable of determining whether model year 1994 and later model year light-duty vehicles and light-duty trucks, when properly maintained and used, will pass the inspection methods and procedures established under section 7541(b) of this title for that model year, under conditions reasonably likely to be encountered in the conduct of inspection and maintenance programs, but which those programs cannot reasonably influence or control. The conditions shall include fuel characteristics, ambient temperature, and short (30 minutes or less) waiting periods before tests are conducted. The Administrator shall not grant a certificate of conformity under this subsection for any 1994 or later model year vehicle or engine that the Administrator concludes cannot pass the test procedures established under this paragraph.

No engineer is going to try to pull off a hoax lie that without the instructions and approval of their higher-ups. Why? Because anyone else with access to the numbers could prove that they had done it. No engineer could expect to keep that sort of misbehavior from everyone else within the company, because any maintenance audit of the software would reveal it and track it right back to the exact people who executed it. But a high company executive could easily convince themselves that they could keep those numbers buried within a single department and away from external review, and that they would be sufficiently removed from the process to survive if it leaked - which is precisely what appears to be happening.

I'm confused at why preheating a catalytic converter is considered a defeat device.

Because it is pre-heated with exhaust that violates emissions standards. At least that is my understanding.

Isn't that what all modern cars do? By definition, the exhaust coming out of the catalytic converter when it is cold are nowhere near where they will be once the converter is hot. That's just basic chemistry and there isn't really a way around it, except for pre-heating the cats somehow, which is what Audi and Porsche were doing. That, to me, sounds like they were actually doing the right thing...

Maybe I'm way off, but I thought all cars undergoing a cold start (especially in cold weather) initially emit significantly more pollutants for the first few minutes of operation, and that this period was minimize by having the ECU idle the engine higher, recirculate exhausts, running richer, etc. until the catalytic converter reached its operating temperature. I also thought that the emission numbers indicated on cars' specs are normally not the cold start numbers, but the steady state numbers once the car is warm.

OK, so management looked the other way, while demanding "Good, Fast AND Cheap" from the engineers (who no doubt informed their immediate managers that this was not possible, and were told, effectively, "I don't want to hear excuses, I want a product that meets the specs, and soonish"), leaving them only one way out.

I'm sure some smart engineer kept an email trail of all this...and that will eventually come out.

To be fair, the world also looked the other way in a rush to move to the myth of "clean diesel". Dubious claims that they more efficient and better for the environment were laid to rest years ago. And yet they were still embraced as great solutions to climate change, and to roll out new additional clean diesel engines to replace ones that were traditionally gas/petrol based. Clean Diesel produces more CO2 than comparable gas/petrol vehicles and has more particulate pollution as well. Even with slightly higher fuel economies, they still increase oil dependence as it takes more crude to produces a gallon of diesel. So while there is definitely a huge improvement of clean diesel over regular diesel, there are virtually no benefits of a clean diesel over a gas/petrol engine.

In an effort to capitalize on the clean diesel craze VW broke a bunch of rules, because apparently clean diesel is not even as "clean" as claims said it was.

Internal remedies will include new processes for developing and approving ECUs, as well as upgraded IT systems that will help VW track its work and employees better. VW will also release real-world emissions data and will use third parties to verify the numbers in future.

I hope this is more than just lip service to reestablish a company's commitment to producing quality cars.

"Looking back, we regrettably have to realize that the developers of the EA 198 project simply couldn't find a way to meet tougher US NOx limits by permissible means. Or at least a way... which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOx levels by various means such as adjusting exhaust gas recirculation levels depending on whether the vehicle was on the road or on a test bench," Pötsch said.

This is where the cultural shortfall drove the entire cheating initiative. Corporate heads demanded a production unit that passed the tests and didn't budget enough resources to accomplish that legally. They had a deadline to meet and a budget that wouldn't cut into corporate profits. Corporate management doesn't want to hear about technical challenges. They want to know when the investment will turn into sales and they don't care how it gets done. Engineers are left with little choice in the matter but to follow management's directives any way they can.

"Looking back, we regrettably have to realize that the developers of the EA 198 project simply couldn't find a way to meet tougher US NOx limits by permissible means. Or at least a way... which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOx levels by various means such as adjusting exhaust gas recirculation levels depending on whether the vehicle was on the road or on a test bench," Pötsch said.

This is where the cultural shortfall drove the entire cheating initiative. Corporate heads demanded a production unit that passed the tests and didn't budget enough resources to accomplish that legally. They had a deadline to meet and a budget that wouldn't cut into corporate profits. Corporate management doesn't want to hear about technical challenges. They want to know when the investment will turn into sales and they don't care how it gets done. Engineers are left with little choice in the matter but to follow management's directives any way they can.

"Looking back, we regrettably have to realize that the developers of the EA 198 project simply couldn't find a way to meet tougher US NOx limits by permissible means. Or at least a way... which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOx levels by various means such as adjusting exhaust gas recirculation levels depending on whether the vehicle was on the road or on a test bench," Pötsch said.

This is where the cultural shortfall drove the entire cheating initiative. Corporate heads demanded a production unit that passed the tests and didn't budget enough resources to accomplish that legally. They had a deadline to meet and a budget that wouldn't cut into corporate profits. Corporate management doesn't want to hear about technical challenges. They want to know when the investment will turn into sales and they don't care how it gets done. Engineers are left with little choice in the matter but to follow management's directives any way they can.

Just following orders, eh?

They weren't ordered to cheat. They were ordered to get the vehicle into the show rooms with an insufficient timeline and budget. The only way they could do it was by cheating so they did and everyone in the chain of command swept it under the rug.

OK, so management looked the other way, while demanding "Good, Fast AND Cheap" from the engineers (who no doubt informed their immediate managers that this was not possible, and were told, effectively, "I don't want to hear excuses, I want a product that meets the specs, and soonish"), leaving them only one way out.

I'm sure some smart engineer kept an email trail of all this...and that will eventually come out.

Exactly this. I'm more than a little miffed that so many organizations and people are not pushing harder on the question on who exactly provided the budget and schedule that didn't allow for proper development and testing. Clearly, it was obvious to at least some people that what came down from the top was a completely unrealistic set of constraints on time and money. And yet, no one is calling out the executives on this?

I won't consider this episode closed until I hear an executive take responsibility for forcing their employees into untenable positions. Olympus executives were crucified for something very similar (executives essentially put out completely unrealistic quarterly targets, knew it, and the employees were left with no other option than to cook the books to not get written up or fired). I see no reason why this is different.

"Looking back, we regrettably have to realize that the developers of the EA 198 project simply couldn't find a way to meet tougher US NOx limits by permissible means. Or at least a way... which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOx levels by various means such as adjusting exhaust gas recirculation levels depending on whether the vehicle was on the road or on a test bench," Pötsch said.

This is where the cultural shortfall drove the entire cheating initiative. Corporate heads demanded a production unit that passed the tests and didn't budget enough resources to accomplish that legally. They had a deadline to meet and a budget that wouldn't cut into corporate profits. Corporate management doesn't want to hear about technical challenges. They want to know when the investment will turn into sales and they don't care how it gets done. Engineers are left with little choice in the matter but to follow management's directives any way they can.

Just following orders, eh?

They weren't ordered to cheat. They were ordered to get the vehicle into the show rooms with an insufficient timeline and budget. The only way they could do it was by cheating so they did and everyone in the chain of command swept it under the rug.

Sorry dude, but you just got pwned by the cheeky reference to a not-so-proud moment in German history.

OK, so management looked the other way, while demanding "Good, Fast AND Cheap" from the engineers (who no doubt informed their immediate managers that this was not possible, and were told, effectively, "I don't want to hear excuses, I want a product that meets the specs, and soonish"), leaving them only one way out.

I'm sure some smart engineer kept an email trail of all this...and that will eventually come out.

To be fair, the world also looked the other way in a rush to move to the myth of "clean diesel". Dubious claims that they more efficient and better for the environment were laid to rest years ago. And yet they were still embraced as great solutions to climate change, and to roll out new additional clean diesel engines to replace ones that were traditionally gas/petrol based. Clean Diesel produces more CO2 than comparable gas/petrol vehicles and has more particulate pollution as well. Even with slightly higher fuel economies, they still increase oil dependence as it takes more crude to produces a gallon of diesel. So while there is definitely a huge improvement of clean diesel over regular diesel, there are virtually no benefits of a clean diesel over a gas/petrol engine.

In an effort to capitalize on the clean diesel craze VW broke a bunch of rules, because apparently clean diesel is not even as "clean" as claims said it was.

Volkswagen pretty much single-handedly drove the myth of clean diesel as part of their (and specifically Piech's) goal to become the #1 car-maker in the world. It's kinda like how coal companies are driving the myth of clean coal... sure, there are some ways you can make it clean, but no one wants to pay for it or take the time to do it.

"Looking back, we regrettably have to realize that the developers of the EA 198 project simply couldn't find a way to meet tougher US NOx limits by permissible means. Or at least a way... which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOx levels by various means such as adjusting exhaust gas recirculation levels depending on whether the vehicle was on the road or on a test bench," Pötsch said.

This is where the cultural shortfall drove the entire cheating initiative. Corporate heads demanded a production unit that passed the tests and didn't budget enough resources to accomplish that legally. They had a deadline to meet and a budget that wouldn't cut into corporate profits. Corporate management doesn't want to hear about technical challenges. They want to know when the investment will turn into sales and they don't care how it gets done. Engineers are left with little choice in the matter but to follow management's directives any way they can.

Just following orders, eh?

They weren't ordered to cheat. They were ordered to get the vehicle into the show rooms with an insufficient timeline and budget. The only way they could do it was by cheating so they did and everyone in the chain of command swept it under the rug.

I'm not claiming that senior management was unaware, but surely some proof of that will come out if it is the case. So far I haven't seen it.

My point was merely that we can't cast blame only on the senior management. Responsibility for things like this rests at every level.

"Pötsch said that blame for the NOx cheating was caused in part by "individual misconduct" as well as failed internal procedures, and a culture in some departments "that tolerated breaches of the rules.""

OK, so management looked the other way, while demanding "Good, Fast AND Cheap" from the engineers (who no doubt informed their immediate managers that this was not possible, and were told, effectively, "I don't want to hear excuses, I want a product that meets the specs, and soonish"), leaving them only one way out.

I'm sure some smart engineer kept an email trail of all this...and that will eventually come out.

I have to disagree.Think about what the reality is, by what would you do.1. Release said emails, potentialy losing your job, only to bring limited attention and perhaps punishment to the executives who causes this.2. Show emails to said executive, get raise, lots of vacation, phone it in to work for years while you relax on extended holidays.

Internal remedies will include new processes for developing and approving ECUs, as well as upgraded IT systems that will help VW track its work and employees better. VW will also release real-world emissions data and will use third parties to verify the numbers in future.

I hope this is more than just lip service to reestablish a company's commitment to producing quality cars.